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Bob Meyer

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Bartercard�s New Future

(The following letter was forwarded to BarterNews from Bartercard CEO Wayne Sharpe.)

Dear shareholders, members and staff worldwide:  

By now you will be aware that Bartercard Plc has been de-listed from the London Stock Exchange (LSE). This was an automatic process which was effectively forced upon us as a result of the dramatic resignation of our Nomad, against whom we have issued proceedings for breach of contract and damages.

The actions they took caused damage to the company�s reputation which led to us being unable to get a new Nomad in the 30 days required. The damage to shareholders� value is obvious. A class action to recover that value is in the process of being developed against those who have caused you damage.

I can say that Bartercard has been in business for almost 16 years, and was only listed for 18 months, so it is a ridiculous proposition that we will cease to operate or go bust by not being public. This unfounded speculation has been propagated by some people, particularly competitors.

We can categorically state that the company is solvent and will continue to operate for many years to come. It is business as usual for the company. Shareholders now hold shares in an unlisted public company. The same board controls the same management who direct the same staff to service the same clients. Record trading results for both Australia and the UK have been achieved in recent months.

Life goes on and gets better for those loyal shareholders who have stuck by us and believe in our business.

The huge expense of becoming public unfortunately never really achieved the objectives set, in particular raising capital. So really other than a small amount of new capital � of which I was personally the largest single contributor � the company got more cost than benefit as a public company on Aim. Importantly the indirect cost of the huge amount of time by executive directors and management for no positive result was frustrating and ultimately unproductive. However the intention had been to continue the public listing and get better results by raising capital via the sale and lease back of our building, then we expected to see an improvement in share price and liquidity based on the positive financial results we would report, and ultimately build a larger shareholder base.

Unfortunately for Bartercard and its shareholders our former Nomad chose to resign and cause the suspension and ultimately the de-listing of our shares at a time when our most positive announcements in our history took place. So shareholders never got the benefit of that in terms of their share value, nor the ultimate flow toward the capital raise we had worked so hard and long to do.

But we could not prevent their folly despite my repeated attempts to stop their breach of contract and complaints to the London Stock Exchange.

All we can do now is redress their action in the Commercial Court and recover damages. The Board has specifically endorsed this course of action and we will keep you informed of the action�s progress.

We will look at whatever options we can to get liquidity for shareholders, and we are reviewing numerous alternatives currently. However, in reality, for now we need to focus on the future as a private company once again, we still intend to pay dividends to shareholders as and when we can.

And the future looks amazingly positive.

All our operational subsidiary licenses (Australia, UK and Dubai) are forecasting profits this year. BCI has record license sales in progress, and our plan to develop more into Europe can now be a stronger focus for me as I shall now be freed from the distractions of Plc issues.

Already in the last month we have developed strong communication with prospective licensees in the Czech Republic and Sweden. And of course the agreement with South Africa looks set to be a real powerhouse.

The Australian operation is profitable and growing again. Based on current activities and trends it will be back to its record breaking best next year. The rollout of Eftpos is starting to take effect in terms of streamlining client transactions and reducing time costs for Bartercard and members. And the increased interest rates and drought are looking to push the economy into a cash constrained barter-friendly economic cycle for the next 2 or 3 years at least. This means the members who retained their accounts and have been actively trading will be the most likely not to have any negative effect when the crunch comes. So next year should be huge.

Bartercard UK is becoming the poster child of the group. Growth is now right up there with New Zealand and the team are fired up. Records in terms of trading are being smashed month on month and with a plan to develop more franchises inside the M25 in particular (and central London) it�s quite possible we could double our offices in the UK next year, and at least double trade volume.

The UAE is also growing and re-establishing our previous great reputation as a high growth company in the fastest growing city in the world.

So with the traumatic events behind us, the sale and lease back of our building in Australia provides all the capital we need to achieve our goals and return to a highly profitable private company as we were. We are strong, and we have survived and grown in the face of adversity and this is now a thing of the past.

To quote Mark Twain - �The rumours of my death have been greatly exaggerated!� Bartercard is here to stay. We have many years of trading ahead and many countries to advance into.

In 1991, our founding year, I said �The mountains we climb today are only foothills compared to the mountains we have yet to climb.� Well today we got our climbing equipment back.

Wayne Sharpe,
Executive Chairman

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